Major Home Renovations

We are looking to add a 2nd floor and create an open floor plan for the 1st floor. It's definitely going to be a major project, but I am so tired of looking for houses that are selling wayyyy above asking. We got an estimate of 250k for upstairs only or 500k for both (1st and 2nd floor). For those of you who have done major renovations, how did you finance it? Home Equity Loan? HELOC? We've reached out to our mortgage broker who threw out there that we can refinance the house, but we have a super low rate of 2.9! Everyday the interest rates are creeping higher and higher. Please help, not sure where to begin.

Re: Major Home Renovations

i haven't done this, but remember when my parents did major work on the house i grew up in. boy, it's quite an undertaking.

with the little i know, i'm going to say that investigate all those options you listed and see which gives you the best rate and cost... most of these loans have some kind of origination fee.

best of luck to you on this large project.

Re: Major Home Renovations

We just went through the same thing. We need a larger home, but looked forever and this market was just too stressful to navigate. We decided to stay and add an addition. I should say another piece to this is we are taking in my mother in law who is almost 80 and doesn't want to live alone anymore...SO we are funding half from her and we did the other half through a cash out re-finance. We bought our house over 10 years ago so we didn't have a large mortgage (since homes were somewhat reasonable then) and we had plenty of equity - and got a lower rate than when we purchased.

We worked with an architect to have the plans done and now we just applied for the permits so now we are going through that process. We interviewed several contractors and bids and chose one. You should get bids from at least 4, in my opinion.

We should be building by the end of March...hopefully, pending no permit issues.

To give you an idea of cost, we are adding about 1400 square feet which includes 2 bathrooms.

We are building back, not dormer up since we have a large property. All builders told us that is more expensive as foundation work is costly. Dormering up is less.

We are paying $242,000. Like I said to build 1400 sq feet of additional living space which includes a suite for my Mlaw (with bathroom), a new master bedroom (with bathroom) a mudroom and a new dining room with walk in pantry.

Its A LOT of money...but we didn't really have a choice considering the circumstances. Plus the fact that she is helping financially, made it an easier decision.

Good luck!